In a landmark case, a Manhattan Federal Court awarded more than $2.9 million to a group of 17 waiters and busboys from a Chinatown restaurant where the owners routinely stole their tips and failed to pay overtime wages.

Judge Alvin K. Hellerstein ruled that the owners, Jonathan Chiu, his wife, Jan, and Daniel Ong, were liable after they defaulted by failing to show up for court hearings in the workers' suit.

The restaurant, New Silver Palace, has been closed since it went into bankruptcy December 2002. The 800-seat eatery, located on the corner of Canal St. and the Bowery, was one of Chinatown's largest banquet halls.

The case marked the first time a restaurant has been found liable under the federal RICO racketeering laws for tip-stealing, a long-time practice in many Chinatown restaurants.

Nine other owners who were named in the suit settled in June for $489,000 on the first day of their trial.

The 17 workers charged that their bosses forced them to hand over up to 30 percent of their tips between 1997 and 2000 and also refused to pay them overtime. Anyone who complained against these practices was fired.

"Many owners of businesses believe that they can violate the labor laws with impunity by simply letting their companies go into bankruptcy," said Kenneth Kimerling, an attorney from the Asian American Legal Defense and Education Fund (AALDEF) who is representing the workers. "With this opinion, it is clear that these owners can also be held liable, not only for labor law violations but for RICO violations as well."

AALDEF is representing the workers along with pro bono attorneys from Davis Polk and Wardwell, one of New York's largest firms.

But it's still not clear when or if the workers will actually be able to collect any part of the judgment. The Chius and Ong have disappeared since the suit was filed. "But we believe they are still in New York," said Kimerling. "Next we will inquire into their assets, attach them and eventually liquidate and take them."

Labor troubles at the restaurant, which was originally called Silver Palace, date back to 1980, when workers formed Local 318, the first independent restaurant workers union in Chinatown. In 1993, the restaurant's previous owner locked workers out for seven months during a contract renewal dispute. Courts ruled that the action was illegal and the owner at the time, Richard Chan, was ordered to pay $1.5 million in back wages to the workers. Chan later filed for Chapter 11 bankruptcy and the money was never collected because in that case the suit was filed against the restaurant, rather than the owners.

Chan, who maintained a stake in the new restaurant, was one of the defendants in the current case who settled last summer. He settled his part of the suit for $450,000.